Best Investment Funds for NISA: A Foreigner's Guide

Last updated: February 2026

You've opened your NISA account. You understand the difference between the Tsumitate and Growth quotas. Now comes the question that actually matters: what do you buy?

The reassuring answer is that this decision is simpler than it appears. Japanese NISA investors have overwhelmingly converged on a handful of ultra-low-cost index funds, and for good reason. Two funds alone — eMAXIS Slim All Country and eMAXIS Slim S&P 500 — absorb the vast majority of NISA inflows. You don't need to be a stock-picking expert to build a solid NISA portfolio. You need to understand a few key funds, pick one or two, and stay the course.

This guide compares the most popular NISA funds, addresses the extra considerations foreign residents face (currency risk, departure planning, PFIC issues for Americans), and offers practical portfolio examples for different situations.

→ Related: Tsumitate vs Growth Investment: Which NISA Type Should You Choose? — decide how to split your quotas before choosing funds.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy any specific fund. Past performance does not guarantee future results. Please consult a qualified financial advisor for guidance tailored to your situation.

Three Principles for Choosing NISA Funds

Before comparing individual funds, anchor your thinking in three principles that apply regardless of nationality.

Minimize costs. The expense ratio (信託報酬 / trust fee) is deducted from your returns every single day. A difference of 0.1% per year sounds trivial, but over 20 years on a ¥10 million portfolio, it compounds into hundreds of thousands of yen. In the world of index funds tracking the same benchmark, cost is the single most reliable predictor of relative performance: cheaper almost always wins.

Diversify broadly. No one can reliably predict which country or sector will outperform over the next decade. A fund that covers the entire global stock market gives you exposure to whatever ends up driving growth, whether that's US tech, European industrials, or emerging market consumers.

Keep it simple. One or two funds is genuinely sufficient for a complete NISA portfolio. Complexity doesn't add returns — it adds management burden and increases the chance you'll make emotional decisions. The best portfolio is one you'll actually maintain for years.

The Top Funds Compared

eMAXIS Slim All Country (オール・カントリー) — "All-Country"

The undisputed king of Japanese NISA investing. Known affectionately as "Orucan" (オルカン), this fund has accumulated over ¥6 trillion in net assets, making it the largest investment trust in Japan.

What it tracks: MSCI All Country World Index — approximately 2,800 stocks across 23 developed and 24 emerging market countries, weighted by market capitalization.

Expense ratio: 0.05775% per year. To put this in perspective, that's ¥577 annually on a ¥1 million investment. Even by global standards, this is remarkably cheap for a fund covering the entire world.

Geographic breakdown (approximate): US 63%, Japan 5%, UK 3%, other developed markets 15%, emerging markets 14%.

Why it's popular: One fund, complete global coverage, lowest-tier costs. If you want a single answer to "what should I invest in," this is it. The heavy US weighting reflects the reality that US companies represent roughly 63% of global stock market capitalization — it's not a bet on America, it's a mirror of the global market.

eMAXIS Slim S&P 500

The second most popular NISA fund, and for investors who want to lean into the US market, the default choice.

What it tracks: S&P 500 Index — the 500 largest US companies by market cap, including Apple, Microsoft, NVIDIA, Amazon, Alphabet, and Meta.

Expense ratio: 0.08140% per year.

Why investors choose it: The S&P 500 has delivered strong returns over the past 10–15 years, outperforming most other major market indices. Investors who believe US economic and technological dominance will continue prefer this concentrated exposure. However, this outperformance partly reflects a strong US dollar and elevated US tech valuations — neither of which is guaranteed to persist.

eMAXIS Slim Developed Markets ex-Japan

What it tracks: MSCI Kokusai Index — developed markets excluding Japan (22 countries). US allocation is approximately 75%.

Expense ratio: 0.09889% per year.

Why it exists: For investors who want developed-world exposure without emerging markets or additional Japan weighting (since you're already earning yen income in Japan). Think of it as "All Country minus emerging markets minus Japan."

Tawara No-Load Developed Markets

What it tracks: Same MSCI Kokusai Index as above.

Expense ratio: 0.09889% per year.

Why consider it: Managed by Asset Management One, this is a strong alternative to the eMAXIS Slim version with comparable cost and solid net assets. The performance difference between funds tracking the same index at similar costs is negligible — choose whichever is available at your brokerage.

SBI V S&P 500 Index Fund

What it tracks: S&P 500 via Vanguard's VOO ETF.

Expense ratio: 0.0938% per year.

Why consider it: A slightly different structure — this fund invests in Vanguard's US-listed VOO ETF rather than directly holding the underlying stocks. Available primarily through SBI Securities. Performance is virtually identical to eMAXIS Slim S&P 500.

Rakuten All Country Stock Index Fund

What it tracks: MSCI ACWI (same as eMAXIS Slim All Country).

Expense ratio: 0.0561% per year.

Why consider it: Launched in 2023 as Rakuten's competitor to eMAXIS Slim All Country, with a marginally lower expense ratio. Primarily available through Rakuten Securities. A perfectly valid alternative to the eMAXIS version.

eMAXIS Slim Balanced (8-Asset Equal Weight)

Expense ratio: 0.14300% per year.

What it holds: Equal 12.5% allocations across eight asset classes — domestic stocks, foreign stocks, domestic bonds, foreign bonds, domestic REITs, foreign REITs, emerging market stocks, and emerging market bonds.

Why consider it: For investors who want a smoother ride. The bond and REIT allocations dampen volatility compared to 100% stock funds. The trade-off is lower expected long-term returns. Best suited for conservative investors or those nearing a planned departure from Japan who want to reduce portfolio volatility.

Extra Considerations for Foreign Residents

The Double Currency Risk

This is the factor that most "best NISA fund" articles miss, because they're written for Japanese investors.

When a Japanese investor buys eMAXIS Slim All Country, they face one layer of currency risk: the yen value of their foreign-currency holdings fluctuates with exchange rates. A weaker yen boosts returns; a stronger yen reduces them.

As a foreign resident, you face a second layer. If you ultimately measure your wealth in your home currency — dollars, euros, pounds, whatever — then the yen-to-home-currency exchange rate adds another variable. Your NISA returns, denominated in yen, must then be mentally (or actually) converted back to your home currency.

The practical implication: a global stock index fund like All Country provides natural currency diversification within the fund itself (the underlying companies earn revenue in dozens of currencies). This is actually a point in favor of broad global funds over Japan-only or single-country funds — you get built-in multi-currency exposure regardless of what happens to the yen.

Liquidity and Your Departure Timeline

When you leave Japan, your NISA account closes and holdings transfer to a taxable account. At that point, you may want to sell everything and repatriate funds to your home country.

Major index funds (the eMAXIS Slim series, Tawara, SBI V, Rakuten equivalents) can be sold on any business day, with proceeds typically available within two to three business days. This is perfectly liquid for departure planning.

Where liquidity can become an issue: small-cap individual stocks with thin trading volume, certain REITs, or niche thematic funds. If there's any chance you'll leave Japan within the next few years, keep the core of your portfolio in highly liquid, mainstream funds.

→ Related: Leaving Japan? What Happens to Your NISA Account

Do You Need Japanese Stocks?

Living in Japan doesn't mean you should overweight Japanese stocks. You already have significant "Japan exposure" through your yen-denominated salary, your Japanese bank deposits, and potentially your Japanese pension contributions. From a diversification standpoint, investing primarily in non-Japanese assets actually makes more sense — it reduces your concentration in the Japanese economy.

eMAXIS Slim All Country includes about 5% Japanese stocks by default, reflecting Japan's weight in the global market. For most foreign residents, this is sufficient Japan exposure without adding more.

If you're specifically interested in Japanese companies — perhaps you work in a sector and see domestic opportunities — the Growth quota allows you to buy individual Japanese stocks or TOPIX-tracking funds. Just be deliberate about it rather than defaulting to home-country bias.

Fund Selection for US Citizens

American citizens and green card holders cannot use the funds listed above without severe tax consequences. Under US tax law, all Japanese investment trusts are classified as PFICs (Passive Foreign Investment Companies), triggering punitive taxation that can far exceed ordinary rates.

The solution: invest exclusively through the Growth quota in US-domiciled ETFs via Interactive Brokers Japan (IBSJ), which is launching NISA services in July 2025.

Recommended US-Domiciled ETFs

VT (Vanguard Total World Stock ETF) — The closest equivalent to eMAXIS Slim All Country. Covers the entire global stock market. Expense ratio: 0.07%.

VOO (Vanguard S&P 500 ETF) — Tracks the S&P 500. Equivalent to eMAXIS Slim S&P 500. Expense ratio: 0.03%.

VTI (Vanguard Total Stock Market ETF) — The entire US stock market (~4,000 stocks), slightly broader than the S&P 500. Expense ratio: 0.03%.

VXUS (Vanguard Total International Stock ETF) — Everything except the US. Useful if you want to pair it with VTI for a customized global allocation. Expense ratio: 0.05%.

These ETFs are domiciled in the United States and therefore not classified as PFICs. When purchased through IBSJ's NISA Growth quota, gains are tax-free on the Japan side. You'll still owe US taxes on worldwide income and must comply with FBAR/FATCA reporting, but you avoid the punitive PFIC regime.

For most US citizens, VT alone is the simplest one-fund solution — global diversification, rock-bottom cost, no PFIC issues.

→ Related: NISA Tax Guide: Do You Owe Taxes in Your Home Country?

Sample Portfolios

The One-Fund Solution (Works for Most People)

eMAXIS Slim All Country only — Tsumitate quota, monthly automatic purchase. One fund, zero decisions after setup, global diversification, 0.05775% annual cost. If you read nothing else in this article, this is the takeaway.

US-Tilted

Tsumitate: eMAXIS Slim S&P 500 at ¥80,000/month Growth: eMAXIS Slim All Country at ¥1,000,000/year lump sum Heavier US weighting through the S&P 500 core, with global diversification via the Growth quota.

Conservative / Shorter Time Horizon

Tsumitate: eMAXIS Slim Balanced (8-Asset) at ¥50,000/month Growth: eMAXIS Slim All Country at ¥500,000/year Lower volatility from the balanced fund, with equity upside from the All Country allocation. Suitable for residents who may leave Japan within 3–5 years and want to reduce the risk of selling during a downturn.

US Citizen Portfolio

Growth only (via IBSJ): VT at ¥150,000/month = ¥1,800,000/year Single ETF, no PFIC issues, full global exposure. The Growth quota's ¥2.4 million annual cap leaves room to add more if budget allows.

What to Avoid

Thematic and sector funds as your core holding. AI, semiconductors, India, clean energy — these make for exciting narratives but unreliable long-term performance. Thematic funds tend to attract money after a sector has already run up, and many underperform broad market indices over full market cycles. If you want thematic exposure, keep it to a small satellite position in your Growth quota, not the foundation of your NISA portfolio.

High-cost active funds. Any fund with an expense ratio above 0.5% needs to consistently outperform its benchmark by more than that margin just to break even against a cheap index fund. The evidence overwhelmingly shows that most active funds fail to do this over long periods. In the Tsumitate quota, this is largely a non-issue (the FSA's screening eliminates most expensive funds), but in the Growth quota, high-cost options are readily available.

Frequent switching. When you sell a holding in your NISA account, the book value is freed up — but only in the following year. Selling and rebuying burns through your annual quota and creates a gap where your money isn't invested. Pick your funds thoughtfully at the start, then resist the urge to chase last year's top performer. The NISA system rewards patience.

The Bottom Line

Fund selection in NISA is one of those rare areas in personal finance where the obvious, boring answer is genuinely the best one. eMAXIS Slim All Country — or its Rakuten equivalent — gives you the entire world's stock market at a cost of less than 0.06% per year. For the vast majority of foreign residents in Japan, this single fund is all you need.

The nuances matter at the margins: US citizens need US-domiciled ETFs via IBSJ to avoid PFIC complications. Investors with strong convictions about US outperformance might prefer the S&P 500 variant. Conservative investors approaching departure might add bonds through the balanced fund. But the core message is the same: low cost, broad diversification, long-term holding.

Don't let the perfect be the enemy of the good. The difference between eMAXIS Slim All Country and eMAXIS Slim S&P 500 matters far less than the difference between investing and not investing. Start with whatever feels right, automate your contributions, and let time do the work.

→ Related: How to Open a NISA Account as a Foreigner in Japan: Step-by-Step | NISA Explained: Japan's Tax-Free Investment Account for Foreign Residents

This article is for general informational purposes only and does not constitute investment advice or a recommendation to purchase any specific financial product. Past performance is not indicative of future results. Please consult a qualified financial advisor for guidance tailored to your individual circumstances.